Posts Tagged 'Business'

April 21, 2010

Building the Better Company

If you had the opportunity to listen to SoftLayer’s CEO, Lance Crosby, speak at this year’s Parallels Hosting Summit you definitely were able to obtain a key understanding as to his views on building solid companies in and through the hosting space. Some of the key points from Lance’s notes in regards to building sustainable businesses in the space were:

•Have a solid plan in place and use it as your guideline

•Create Systems that are scalable and metric driven

•Diversify the personnel and surround yourself with people that are experts in their functional areas and are sound characters. Don’t be a leader that thinks he is everything to all groups within the organization.

•Stop and look for mistakes, quickly correct the root problem and learn/adapt from those mistakes and repairs.

Lance’s message in his speech very closely aligns with a recent blog I read, “How to Build Your Own $23 Billion Company ,” which details the chairman of ASUS and his company’s ability to obtain significant market share in a once closed competitive environment, building a company from the ground up and with significant growth plans for the future. Jonney Shih, Chairman of ASUS, lays out his five rules that he believes are the basis for building any company, be it $500,000, $5,000,000 or $23,000,000,000 (as in the case of ASUS). Similarly to lance’s messages he states the following:

1)Sharpen the Sword – Build a plan and stick to it. Don’t jump from place to place. Have a focus and be the best at it that you can.

2)Ride the Right Wave – Seize the market opportunity. As Softlayer was able to seize the on-demand computing/virtualized data center market, ASUS was able to seize their market position in a time that built the foundation for their company to flourish.

3)Choose the right partners – Shih’s message of personnel is fundamental to his long term growth. “You need to really factor in their innate character,” Shih says. “You are going to work together for a lifetime, hopefully, and their character is as important as their technical knowledge.”

4)Recruit the best team leaders at the very beginning – As Lance’s speech mentions, the opportunity to build your company with a baseline of educated, experienced leaders with true functional, front line expertise will shape your organization for years to follow.

5)Drive the right strategy and confront the brutal facts – Not knowing the bad/ugly parts of business can compound these problems into downright disasters. Having people around you that are willing to look at mistakes with the idea to quickly correct these and move on will dramatically propel a company’s opportunity for longevity and growth. Ignoring things that can be addressed can only be negative in the long term.

Here at Softlayer, we have the good fortune to support many of the thriving hosting providers, VAR’s, managed service providers, and other niche based businesses that are gaining in both size and scale in the industry and really helping the hosting industry move from niche to mainstream. Many of these firms have humble roots such as Softlayer or ASUS in the example above. The key to continuing the mass adoption into the mainstream of the hosting space is to ensure that the leaders of the companies driving the growth are fundamentally sound and built on a proper foundation to achieve sustainable growth. SoftLayer’s groundwork has been laid to help support this growth throughout the industry. In our efforts to become the dominate force in the industry we hope that we have the opportunity to support the endeavors of those businesses and who knows, instead of ASUS, we may be talking about your company and how you have become the next $23,000,000,000 business.

April 14, 2010

The “Truth” (Or Common Sentiments) of Data Center and IT Professionals

In a recent column at searchdatacenter.com there was a list presented regarding the 20 universal truths in the Data Center. It’s a pretty funny list, but as an outsourced, on demand data center services provider, we are often catering to the IT operator’s mentality that resides in these truths. We have a good subset of customers that fall into many of these statements and we are continuously working to address, help, and augment—with the idea to help complete the IT story rather than compete with the IT strategy/needs of our customers… Below, I pulled out a few of the “truths” listed and added Softlayer views of them.

#2 - Upgrading Hardware is cheaper than improving Software – In the Softlayer world our services cater to this theory as a baseline for our offerings. We are constantly allowing customers to ‘right-size’ their compute needs and we are able to do this because of the robust compute offering and the flexible structure embedded in our business model.

#9 – Bandwidth is the same as energy. As more is provided, more is used – We have seen bandwidth usage grow almost threefold over the last 4 years and it’s a result of the internet applications demanding more bandwidth for things like video, voice, etc. Also, linear pricing models allow bandwidth to be less of an unknown and move towards a very predictable usage model.

#14 – It is always costlier and more time-consuming to wait and fix it later – Being able to quickly assess through metrics and functionality reviews, we fully subscribe to if it’s broke, fix it quickly and remove the legacy of the deficiencies. We are all human and will make errors and mistakes and being forward enough to recognize and repair these will continue to ensure your customer, employers, and employees that you have a handle on your business. Have you seen Lance Crosby’s printer stand?

#15 – By the time the CEO has learned enough to ask about a technology, it’s no longer a strategic advantage – My Favorite and have you met Lance Crosby?

#16 Exactly what you want will cost you more that you budget – In the spirit of full disclosure, our CFO, Mike Jones, takes our numbers that we budget for purchases and adds the “actual factor” to it of a +20-30%!!

The list of 20 is well worth the quick read and as I did the first time reading, I would imagine that many of you feel like you could have written this yourself. IT and Data Centers are tough. The goal for all of us is to increase efficiency, reduce costs and ensure that we spend more time moving forward and progressing rather than spending the bulk of our time fixing the past!!

April 12, 2010

How Much Is a Trillion?

Since the budget surpluses of the seemingly long ago Clinton administration have vanished, the government as managed by both major political parties has been on a spending spree. These folks have been throwing down trillions like rappers throw down Benjamins!
Speaking of Benjamins, how big is a pile of a trillion dollars made up of Benjamins? Click here for a quick look.
I did something yesterday that gave me a whole new view of how large of a number a trillion really is. I work with some big spreadsheets of data that I query from our database systems here at work. Using Excel 2007, I can analyze worksheets that are a million records long. So I needed to use the VLOOKUP function in Excel to grab a field of data in one worksheet of a million records and move it into another worksheet of a million records. I run these types of jobs on a server (not my desktop machine) and this process brought my server to its knees.
This particular VLOOKUP job involved a trillion comparisons. For each of the million rows in worksheet #1, it had to search a specified range of one million fields in spreadsheet #2, find the exact match, and bring a specific field of data back into spreadsheet #1. A million rows searching a million fields = 1,000,000 x 1,000,000. And a million times a million equals a trillion.
Now, my server is not a wimpy machine. It has Nehalem processors with 16 total processing cores running at 2.93 GHz. It doesn’t have a stupendous amount of RAM because Excel can only use just so much RAM. But many functions in Excel such as VLOOKUP can utilize all the processing cores you can throw at them.
So when I hit the return key at 5:12 PM yesterday to kick off this VLOOKUP, I noticed that it was taking a while. So I went to Task Manager and I saw that all 16 cores were maxed out at 100% utilization. All sixteen cores remained maxed out until 5:47 PM at which time the job finished successfully.
So, for all the techies out there, that’s your representation of how big a trillion really is. It takes 16 processing cores running at 2.93 GHz each maxed out for 35 straight minutes to run a VLOOKUP involving a trillion comparisons.

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March 15, 2010

What Does it Take to Be a Champion?

I have to admit it, I enjoy watching football. Now that the Super Bowl has come and gone, I took a few minutes to reflect on exactly what the Saints had to go through to get to the big ‘W’. Winning isn’t easy, and requires a lot of hard work and dedication. Furthermore, just because you’re crowned the champion once, doesn’t mean that there’s not a team from Dallas fighting to claim that top spot from you (yes, obligatory Cowboys reference). While I’m insanely jealous that my annual salary pales in comparison to what they make, I can certainly see some parallels in what they do and what we do here at SL.

Imagine all the hard work, long hours, sacrifice, pain, and even creativity it took to get to that spot. The championship isn’t given as a concession, and certainly isn’t taken lightly. Likewise, we don’t claim to be the best, just because we think we are. Our support staff works long hours, sacrifices time with family and friends, and works as a team to provide the best support we can. Our Hardware engineers spend entire days on their feet, running around the multiple datacenters, all ensuring that servers are rapidly provisioned and ready for our customers to release into their production environment. Our Inventory crew works tirelessly in order to ensure that we have the parts we need to keep operations moving. Our team at our corporate office is also deserving of the hosting equivalent to the Lombardi trophy. Our Development and IS crew keep the current systems running smoothly, and are always pushing harder for the next big release. There’s also the number of other employees at corporate that keep the show going.

It goes without saying that SoftLayer didn’t become a champion web hosting provider overnight. Our team worked closely together to ensure that our products, support, and initiatives are top notch. We will continue to push the envelope and will continue to be the best. It takes a lot, but we’re up to the challenge ,and have been for quite some time. Luckily for us, we get to hang out in the NOC, and not have high speed collisions with very large individuals.

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March 12, 2010

The Taxman Is Here

In my role at SoftLayer, I am asked by a number of people for our financial forecasts. Fortunately, we know our business well enough that our expectations for one year ahead have proven to be on target. For example, in December 2008, we told our bankers to expect 2009 net income (profit) to grow 254% over 2008 – and yes, this was at the worst point of the recession. When we closed out the books for 2009, net income actually grew 255%. Our forecasting error was one-third of one percent, and it was an error to the good side.

I can tell you right now that our profit projections will never, ever again be that accurate. Ever. Why is that? Well, after posting such a profitable year, the Taxman has showed up. You see, when you start a business, you usually post losses, not profits, for a while. SoftLayer was no exception here. After posting losses in 2006 and 2007, we turned the corner to profitability in 2008. So why were we not bothered by taxes in 2009? In a nutshell, the tax laws allow you to roll a portion of historic losses forward against profits before you must begin booking tax expenses. We had a meeting yesterday with our corporate tax advisor, and in 2010, we must begin booking tax expenses. Oh boy.

It’s one thing to look at your business model going a year ahead. We can look at macroeconomic indicators that are meaningful to our business and calculate the coefficient of correlation (R-square for you stat geeks) of our growth rate to those indicators and walk things forward. Then based on our anticipated sales growth, we can extrapolate how much datacenter space and power we will need to add, how many routers, switches, and servers to order, and how many people to hire.

Now, if you think that sounds complicated, just wait until you try to forecast how much tax you will have to pay. The biggest problem is the tax laws themselves. They are always moving and changing. In addition, they are sometimes changed retroactively. For example, in 2009, there was an allowance to take bonus depreciation on equipment purchased. (We purchase a lot of it, by the way.) This means that you are allowed to deduct a higher percentage of the dollars spent on equipment from your taxable income and thus lower your tax expense. Well, so far in 2010, there is no bonus depreciation available. BUT, there is a possibility that Congress will extend bonus depreciation into 2010, and make it retroactive to January 1. You tell me – how are we supposed to forecast that?

This is one of but many examples of the craziness of the tax codes that we encounter. As we open more locations in the future, I may blog a bit about some of the other craziness we find.

March 1, 2010

Don’t Run a Data Center – Run Your Business!

I have a friend who recently took a CTO position with a medium-sized company. The huge company that previously employed him moved their entire IT staff a long way outside of Texas to a rather unpleasant location as a cost cutting move. He and many others declined the relocation offer. I can’t say as I blame them.

The other day, he told me some of the interesting things he’s found at his new company. This company is not a technology company but a professional services company. Up to now, they have opted to be in the IT business by running their own data center. To keep this post to a reasonable length, I’ll just mention a few of the things he’s run into.

Keeping the room powered and cool – trust me, this is harder than it sounds. It involves things like redundant power, UPS devices, generators, CRAC units, dehumidifiers, fire suppression, etc. All this stuff must be tested and maintained constantly.

Ordering new servers – they have to go through an online configurator, and then wait to receive the shipment. Once it arrives, they have to unpack it, rack it, power it up, and install the software. The cycle time from ordering a new server to getting it into production can stretch from days to weeks.

Tracking assets – needless to say, he’s found several holes in the process here. Knowing how much RAM is supposed to be in each server vs. what’s really there is a struggle. Heck, even knowing what servers are supposed to be there is a challenge. It seems that as servers are moved, replaced, or disposed of that the asset tracking system and processes are not as solid as he would like. These loose operations also bring heat from accountants and auditors, especially if a server ‘s value is still on the balance sheet but it has actually been tossed out and they no longer own it.

Maintenance – they pay for a service agreement where a tech is guaranteed to be onsite in 4 hours to do anything up to a complete rip and replace to get them back in production. Once he asked why several servers, each north of $10,000 in value, were just laying around in a parts cage. He was told these were for spare parts in case of an emergency, just in case they couldn’t wait 4 hours.

Bankers and lessors routinely ask us who our biggest competitors are. We routinely tell them that they are not other hosting companies – they are companies like the one described above that insist on being in the data center business even though they are not IT infrastructure companies. Since these companies are our largest competition, let’s look at how SoftLayer beats the competition on the items listed above.

Keeping the room powered and cool – as a customer of SoftLayer, you simply don’t have to worry about all this. Not at all. This is a huge savings of time, effort, and money.

Ordering new servers – Once you either run through the configurator or call your SLales rep with your order, your new servers are immediately provisioned. The cloud products are up in minutes, and you can have a few HUNDRED dedicated servers ready for production in a few hours. Not in days or weeks or months.

Tracking assets – From the accounting side of things, you just don’t have to worry about tracking the assets at all as a SoftLayer customer. They are an operating expense to our customers, not a capital expenditure. As far as knowing what assets you have to work with, you have access to the best customer portal in the business where every detail about every server is kept up in real time, right down to the individual sticks of RAM and drive configurations of each server. If you need tighter integration, SoftLayer provides an API to put all this information seamlessly into your environment. Disposing of a server is a simple cancellation ticket. It couldn’t be easier.

Maintenance – this is also a simple ticket submission, which is resolved in an impressive turnaround time. This service is included in SoftLayer’s monthly fees. There is no need to stockpile parts or entire servers for emergencies.

Bottom line, if your business’s core competency is not IT infrastructure, you are being beaten in the IT infrastructure business by SoftLayer. You are spending way too much time, money, and attention to run something that isn’t a part of your business. Hey, if you can’t beat us, then join us!

By the way, my friend is proposing a major project for his company in 2010. That project is getting out of the business of running a datacenter. He faces a lot of resistance to change “the way we’ve always done it” from the other senior executives. From my point of view, it’s a no brainer. But I’m biased I guess. I’d just tell them, hey, don’t run a data center – run your business!

February 9, 2010

Get with it!

I heard a story over the weekend, and somehow I translated it into a blog about SoftLayer. The story went something like this. “A horse walks into a bar…” Oops, wrong story.

A little background, as you may know it was really cold here last week in Texas terms and a sunny day here is usually not 20 degrees for the high. Now for the story, the person told me that he is not really adept at checking his gas gauge on a regular basis and for certain he would not think far enough ahead to get gas on the last warm day before the cold air hit. So he jumps in his car and takes off down the freeway. About 20 minutes into the drive he notices his low fuel light is on and he can’t remember the last time he filled up or approximately how many miles he has driven. He has run dry on fuel a couple of times in the past and doesn’t want to risk it in the cold weather. He has no choice but to pull into the first station he sees and fill up the tank. As he is filling up he starts to think about how much cheaper the gas is closer to his house and how much extra he will be paying for his lack of attention. He makes a mental note that in 2010 he is going to pay more attention to detail and be a little more on top of things going forward.

Has this ever happened to you? Not just with fuel, but how about in technology? How many times have you “jumped” in to a new provider and not checked the gauges? How many times has your hosting provider run out of fuel on you? How much did that down time cost you? Was it more expensive because you just had to do whatever it took to get back up and running? What if you had planned ahead and had better disaster recovery scenarios in place? Could you have same time, money and effort?

Did you know that one definition of insanity is doing the same thing over and over again the same way expecting different results? How can you stay with a failing provider if they are insane? How can you keep using CAPEX for equipment that is obsolete the minute you take it out of the box? How can you keep running your site, application or database without a good backup policy? You still haven’t added that next piece of redundancy, why not? All these bad habits that you continue to carry from year to year have to go! These are no different than eating too much chocolate! That is the habit I am giving up in 2010, what is yours?

Make 2010 different. Give us a call.

January 22, 2010

A Little History Lesson and Reflection

In this industry, it seems very easy to get in the rut of looking forward without stopping to take the time and look back. Whether it is a project deadline or just planning for the future, past accomplishments sometimes get lost in the day to day workload. I remember back on January 23rd of 2006—exactly four years ago tomorrow—when we opened the doors. We had 17 employees and around 1,000 servers in our one and only Dallas server room. With just 17 employees you can imagine we wore many hats, and I will not miss or take for granted prepping racks such as putting cage nuts or rails in ever again.
From our humble beginnings, things grew at a rapid pace to say the least. Over the last four years, we have grown to 175 employees, 25,000+ servers spanning facilities in Dallas, Seattle, and Washington D.C. and just recently passed $100 million annualized run rate mark. Not too shabby for four years, if I do say so myself.
The product and service offering have grown at an astounding pace as well. Thanks in part, I think, to our API—launched publicly in May of 2007. Was that over two years ago? It seems like yesterday. On top of that, there have been too many individual products to list here. Some highlights would fall into the areas of: CloudLayer, StorageLayer, backup solutions, and security solutions—just to name a few!
Looking forward I think 2010 is going to be a big year for SoftLayer, not that the past years haven’t been. I cannot get into any details; but, as usual there are big plans on the horizon, and you know we aren’t planning on slowing down anytime soon. Looking back, it has been a packed and crazy four years, but I would not trade it for anything.

January 20, 2010

Mexican Food vs. On Demand Infrastructure

My friend Ric Moseley has an interesting theory regarding Mexican food. He claims that all Mexican food has the same basic major components, each dish just stacks the components up in different ways. The major components are tortillas, meat and sauce. Of course there are a couple of different ways to prepare each of these components, but in the end, it really boils down to tortillas, meat and sauce. This applies to just about every main-line dish you find on the menu at any number of the local Tex-Mex restaurants. Crispy tacos, soft tacos, enchiladas, tostadas, burritos, fajitas, nachos, quesadillas, flautas, tamales (well almost)... Add more here... I'm going to stop myself before I start sounding like Benjamin "Bubba" Bufford-Blue from Forrest Gump, but you get the idea. By no means am I knocking the combined assembly. Quite the opposite; I'm a huge fan! When it comes down to it, I appreciate the creativity that is involved in putting these ingredients together in such a manner that the finished combination is far greater than the sum of its parts.

And that kind of leads me back to what SoftLayer brings to the table, so to speak. SoftLayer provides all sorts of components for the modern enterprise. Plenty of folks use them as is, heck who doesn't enjoy a warm fresh tortilla with a pad of butter. However, for many people, it’s just an appetizer. The real satisfaction is from the combination of the united components when that steaming plate of enchiladas arrives. One of the great satisfactions of my job is seeing how our customers roll up our components in new and creative ways. The array of application deployments that are hosted by SoftLayer is entirely staggering. Let me throw on my digital chef hat for a minute. Start with a private network database, add public network servers, mix in some cloud computing for quick scalability, and wrap it all in a load balancer. Que bueno! That's some good cooking, and this chef is off to the margarita machine!

December 30, 2009

The Newbie

Hi, I am the newbie and just wanted to start off saying thank you to everyone for making me feel so welcome. I have really enjoyed my first week here at SoftLayer. I can honestly say, this is the most exciting and fun job I have had. SoftLayer should win the Best Places to Work in DFW for 2010!

I think the best part about starting right before the holidays is getting to share the holiday cheer with all my new co-workers. As most people know, most companies get busy around the holidays which can cause tension and stress in the workplace. Coming into SoftLayer one of the major things I liked is that no matter how busy we are there is still a sense of peace and calmness; this is a great asset in a workplace.

As most would know, when you first start out at a new company you need to do research to learn about your new company and the industry it is involved in. These first few days I have been reading a bunch of different articles and websites to learn more about what SoftLayer does and to get a feel for the industry. I have to say I am still rather confused. There are so many technical terms and Wikipedia doesn’t pick up on all of them (ha ha). The more research I do, though, the more I pick up on certain things. I still have more to learn but I am eager and excited to learn more about SoftLayer and the industry. Now off to do more research!

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